Unlimited Digital Access: Only $0.99 For Your First Month

Analyst William Power at Robert W. Baird & Co. cited the merger’s potential to make T-Mobile a stronger competitor as one reason he cut his rating on Sprint shares to underperform, the equivalent of a suggestion to sell.

Others have said competitive issues may be enough motive for Sprint to step between the would-be partners by making an offer to buy MetroPCS. The Wall Street Journal reported Thursday that Sprint’s board of directors planned to discuss the possibility of a bid around mid-day Friday.

The Overland Park-based wireless carrier made no official comments Friday.

Shares of Sprint gained 11 cents Friday and closed at $5.20, which recaptured losses from Thursday. Similarly, shares rose 30 cents Wednesday, more than offsetting a 28-cent loss Tuesday when reports of the T-Mobile/MetroPCS deal surfaced.

MetroPCS shares fell 4 cents Friday, closing at $12.65.

Analysts generally consider that a Sprint deal for MetroPCS would help the No. 3 wireless carrier in its struggle to compete with larger rivals Verizon and AT&T Inc. It would add customers and revenues and improve Sprint’s financial condition thanks to MetroPCS’ stronger economic position.

Analysts also have said that Sprint might pursue a purchase of Leap Wireless International Inc., which sells under the Cricket brand, but add that it is clearly the lesser prize.

Power doesn’t disagree with that.

One of his concerns is that Sprint has missed an opportunity to acquire MetroPCS and reap those potential benefits, while instead allowing its closest rival to become a greater competitor. Sprint has been gaining customers at T-Mobile’s expense, particularly since it began to offer the iPhone, something T-Mobile doesn’t do.

Even if a Sprint bid for MetroPCS wins the day, Sprint will have lost some of the potential benefits it might have gained by acting ahead of T-Mobile’s deal, Power wrote.

Power also is concerned about Sprint’s ability to maintain its share of subscribers who buy service under a two-year contract, rather than the month-to-month subscribers that MetroPCS has.

It also may lose ground against AT&T and Verizon as the new faster-speed Long Term Evolution, or LTE 4G, technology becomes more popular, Power’s note said. Apple Inc. added LTE to its new iPhone 5, which Sprint sells. But Sprint’s LTE network coverage lags far behind Verizon and AT&T.

Power also wrote that a combined T-Mobile and MetroPCS would have more “useable LTE spectrum” than Sprint currently has. Spectrum is essentially the airwaves each carrier’s licenses allow it to use for its network traffic.

Then there is Sprint’s $21.3 billion of debt and its cash-eating network upgrade, which will lower the company’s operating costs, and the costly subsidies it pays with each new iPhone subscriber, which the company also expects to become a financial benefit over time.

Sprint’s success with its continuing network upgrade and adoption of the iPhone help, Power wrote, but the company’s “long-term risks may actually be worsening.”